Starwood Property Trust Inc. has entered into a definitive agreement to acquire GE Capital’s Energy Financial Services’ Project Finance Debt Business and loan portfolio for $2.56 billion, including $400 million of unfunded loan commitments.
The Energy Project Finance Debt Business of Norwalk-based GE Capital includes a vertically integrated platform with 21 full-time employees across loan origination, underwriting, capital markets and asset management. The loan portfolio is 97 percent floating-rate and consists of 51 senior loans secured by energy infrastructure real assets.
“It has been our intention since we began Starwood Property Trust to build a multicylinder finance company,” said Barry Sternlicht, chairman and CEO of the Greenwich-based company, “with the thought that we should never overstay our welcome in any one business line and always have opportunities to deploy capital into only those verticals where reward clearly outweighs risk.”
Calling Starwood’s commercial real estate activity “our basic and still most important business,” Sternlicht said the GE Capital deal had “the return on investment profile and ability to scale to be material to our $14 billion enterprise.”
Starwood also plans to expand the GE business’ product line, he said.
The Greenwich firm expects to finance the transaction with a new secured term loan facility from MUFG with an initial advance of approximately $1.7 billion and committed capacity for future funding obligations in the loan portfolio. Completion of the deal, subject to the satisfaction of a number of customary closing conditions, is expected in the third quarter.